American Free Enterprise Goals 1 Identify and Describe

American Free Enterprise Goals: 1. Identify and Describe the constitutional protections of free enterprise 2. Explain the principles behind free enterprise 3. Identify and Analyze the role of the consumer in a free enterprise 4. Describe the role of the government in the American system

Constitutional Protections Property Rights 5 th Amendment“(no person) shall be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation” 14 th Amendment carried it out to the state level. Protects Individuals and Corporations

Constitutional Protections cont. Taxation. Article 1 – power to levy taxes, but sections 2 & 9 = direct taxes according to population (all the same) In 1913 - 16 th Amendment – gave Congress right to taxes based on income Contracts – Article 1 Section 10 - prohibits states and federal gov’t from passing laws that interfere with contracts – no wiggling out with political influence

Principles of Free Enterprise Profit Motive – drive to improve one’s financial and material well-being (firms or individuals) Open Opportunity- everyone can compete- there are no legal barriers to entering the market

Economic Rights Legal Equality – everyone is equal in the eyes of the law Private Property- private ownership and control is backed by laws and policies Free Contract & Voluntary Exchange- Producers and consumers decide when, where, and what they will buy/sell and can negotiate and agree to their own terms Healthy Competition is a result of the combination of the Principles and Economic Rights. Mixed Economies that encourage these tend to be successful and beneficial to their citizens.

Role of Consumer Sovereignty- the idea that the consumer/buyer has the larger share of power in the market Affects Producers- If no one is buyin’, they ain’t sellin’. Affects Government- Advisory Councils, Political Lobbies, Public Interest Groups

Role of Government Information- Public Disclosure Laws, Prospectus’ for investments Protecting the People- i. e. Safety Labels, testing of toys, car safety regulations etc. Negative Effects? Kalteen

Macro vs. Micro Macroeconomics- study of behavior and decision-making of economics on a large scale (major trends, nations, world, etc) Microeconomics-study of behavior and decisions on a small scale i. e. families, individuals, businesses U. S. Gov’t seeks to influence macroeconomic behavior In order to see what is happening it looks at…

Gov’t Policies for Growth Employment- normal and desirable is 4%-6% Current – WI: 5. 6% US: 6. 1% (9/14) US Labor Stats. Growth- Measured by the GDP + or Stability – Price levels (inflation, CPI) Financial Institutions inflation calculator

Innovation & Productivity US GDP = $53, 143 World Avg. = $10, 564 (2014) +GDP’s = constantly increasing productivity (pp curves) Work Ethic – commitment to the value of work and responsible , productive activity Technology- New products/processes Obsolete are recycled or repurposed

Role of Gov’t Research Grants – Land and/or $$ Gov’t Research – NASA Intellectual Property Rights • Patent= 20 yrs exclusive rights of production • Copyrights= authors have exclusive publishing rights • Trademarks=right to a name, specific look or identifying feature